Talking Money and Parenting with Jim Rogers, Author of 'A Gift to My Children: A Father’s Lessons for Life and Investing'
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I was intrigued to read that Rogers' girls each have five piggy banks so I asked him what they are used for.
"It started out as just an excessive number," he answers, "because I was an over exuberant first-time father. It is actually useful now since Happy uses one each for her US, Singapore, Euro, Chinese, and UK money. She may wind up as a currency investor!"
I asked Rogers if he will encourage his children to buy stocks, and if so, at what age?
"I will certainly expose them to stocks and other investments," he said. "They must understand money and investing or they will regret it all their lives. I have no idea when or even how. Somewhere along the line, if and when I feel it's right, I will ask, 'Did you know Sanrio makes Hello Kitty and it has a stock?' I suspect my early efforts will fall on deaf ears, but I will persist."
Would Rogers advise parents, who might be first time investors, to buy stocks for their children?
"I would not unless they know a great deal about the specific stocks or the market. For most investors, the best way to invest is to buy an index fund such as the S&P 500 Fund, as index investing has been proven repeatedly to outperform nearly all investors. They could invest a regular amount at set intervals, for instance, into an index of stocks or commodities. That is called dollar cost averaging."
More than anything, Rogers's advice is to stick to your own area of expertise.
"The first rule," Rogers declares, "is to save as much as possible in a safe place, such as the bank or in Treasury bills. Do not invest in anything until you yourself know lots about it. Everyone knows a lot about something - be it cars, fashion, education, or journalism. Stay with what you know. Be alert to major changes happening in your world and then find appropriate investments that you yourself understand...And/or use index products if and when you think you understand stocks or commodities, or other countries or currencies. Do nothing until you see money lying in the corner waiting for you to pick it up."
A Gift To My Children: A Father's Lessons for Life and Investing is published by Random House, $16.
Kirsten Denker is a freelance writer and mother of two.